European Union Trade Commissioner Karel de Gucht said on Monday that the EU was close to reaching a free-trade agreement (FTA) with Mercosur. De Gucht is currently on a diplomatic trip to Paraguay and Uruguay—both members of Mercosur. The commissioner’s statement that “the moment has come” for a trade relationship came shortly after a meeting with Paraguayan President Fernando Lugo in Asunción.
De Gucht’s remarks were strategically timed. March and May will see two bilateral meetings in Brussels. There is also a Mercosur summit in Asunción scheduled for June. In his comments, de Gucht mentioned that the EU has earmarked 130 Euros (US$177) for development until 2013 to facilitate trade and exchanges, with Mercosur being the top priority.
FTA talks between the EU and Mercosur were suspended for six years starting in 2004, but resumed in May 2010 due to the FTA’s potential to help both regions recovery from the global economic crisis. One issue that remains unresolved—and could further hold up the signing of an agreement—is competition between European and South American farmers and animal breeders. Mercosur currently has FTAs with Colombia (2005), Israel (2007) and Egypt (2010).